As mass production has to be accompanied by mass consumption; mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.-- Marriner Eccles

The good thing about science is that it's true whether or not you believe in it.-- Neil deGrasse Tyson/2015 (possibly earlier)

There is still a lot of thinking on the right that if big corporations are happy, they're going to take the money they're saving and reinvest it in American workers. In fact they bought back shares, a few gave out bonuses; there's no evidence whatsoever that they[sic] money's been massively poured back into the American worker.-- Marco Rubio (darling of the Right)/2018

28 October 2015

The Global Euro

Let's take a trip through Tim Cook's head. What must be Tim's constant thought? Well, as CEO of the best company on the planet, it must be: how to continue being the best company on the planet over the next decade, or so. Best, of course, from Wall Street's perspective. After that, he'll just pull the rip cord on his golden parachute.

How did Apple get here, one might muse? Was it Steve's genius? Not really. Apple rescued Steve as much as Steve is credited with saving Apple. Next was a failure, pure and simple. Until the iPhone, Apple was just a niche personal computer company. Still is, if you cull out all the non-computer revenue from the filings.

All that wonderful gross margin from iStuff comes from a simple fact: Apple works by cheap goods sold dearly. It has managed to do this by the cult of personality of Steve. The innards of any Apple product are bought in off-the-shelf. Yes, I know: the Ax cpu is wholly Apple's creation of genius engineering, blah blah blah. Fact is, not so much. All the teardowns of the various A chips indicate: added more cache, added more gpus (bought in, of course), and did a good bit of manual layout. The ISA of an ARM chip is set. The node is set by what the foundries can do. If the MO of Apple were not clear before, then the destruction of GT Advanced Technology should make it clear: Apple gives you a pittance, then shoves a telephone pole up your butt. Which fact answers the Big Question: why does Samsung supply Apple? The answer is, they can afford to. Only another economic Gorilla can. It's what the econ types call countervailing power.

It's worth recalling that the first iPhone had a strong advantage for the first couple of years: Apple had captured the supply market for cap touch screens which fact limited competition severely.

(I started this missive while still on the Island, and it's now mid-day Tuesday. I'll wait for the Apple quarterly news before continuing, although the share price isn't moving up.)

Just got back from a teeth cleaning, and Apple is getting cleaned in after hours. I'm going to wait until 8 pm eastern to continue. ... Was down a bit in after hours, now up a bit in pre-market. So.

"The law of large numbers does kick in," he added."Can the iPhone grow another 2-3 years or is it done growing?... I think investors are worried about the next two-year period. 'Can there really be iPhone growth?' Because absent that there's not really going to be much growth from Apple."

In simple terms: China was the last roll-up opportunity. If that sounds alien, check out what's been going on with Valeant; roll-up city. This quarter went OK, and Christmas may as well. Does either speak to the future? No.

Which brings us to Germany, Greece, the Euro, and the Trilateral Commission. One of, if not the largest, paranoid fantasy of the far Right.

On the right, a number of prominent thinkers and politicians have criticized the Trilateral Commission as encroaching on national sovereignty. In his book With No Apologies, former conservative Republican Senator Barry Goldwater lambasted the discussion group by suggesting it was "a skillful, coordinated effort to seize control and consolidate the four centers of power: political, monetary, intellectual, and ecclesiastical... [in] the creation of a worldwide economic power superior to the political governments of the nation-states involved."

The point, of course, is that Germany, through the elegant expediency of forcing the Euro down all those countries' throats, has the benefit of a New European Order, which solely benefits it. While Volkswagen can adjust the price, in Euros, of the Passat across the countries (last issue of report), higher in France while lower in Greece, for example recognizing ability to pay; this is an active step which is totally different from the passive shocks incurred when China, say, pulls the rug out from under the Renminbi. What Apple wants, should Tim ever admit it, is for all countries to do as Bermuda has: a fixed 1-for-1 exchange with the US Buck. Bermuda even calls it a Dollar. That's what Germany got with the Euro. That's what Apple, and the rest of US multis want. Each quarterly they bitch about "currency problems".

A New World (Monetary) Order controlled by Apple and fellow co-conspirators wouldn't upset them in the slightest.